Transport International blames 28pc jump in fuel costs, higher tunnel fees Transport International Holdings, which runs Hong Kong's biggest franchised bus operator, Kowloon Motor Bus, blamed soaring petrol prices and tunnel fees for a 53.7 per cent slump in underlying profit to HK$126.7 million. Including a one-time gain of HK$43.2 million from the sale of media assets to its 73 per cent-owned subsidiary, RoadShow Holdings, net profit fell 37.9 per cent to HK$169.9 million or 42 HK cents per share in the first six months of this year. The company earned HK$273.7 million in the same period last year. Profit from operations shrank 22.4 per cent to HK$256 million, with Kowloon Motor Bus tumbling 46.1 per cent to HK$113.3 million, or 44.3 per cent of the group's total. Fuel and motor oil costs soared 28.11 per cent to HK$529.1 million, while toll charges climbed 13.4 per cent to HK$161.6 million. Finance costs more than doubled to HK$50.4 million from HK$24.4 million in the year-ago period. Chairman Chung Sze-yuen said this year would be 'another extremely challenging year' for the group's franchised bus operations. 'We have been facing unprecedented difficulties as a result of substantial escalation of operating costs, particularly the sharp upsurge in oil prices since late March and the increases in wages, tunnel toll charges and interest rates,' said Mr Chung. He expects the problems will continue in the second half. The company's profitability and cash flow should, however, improve in the near term since it expects to obtain an occupancy permit by year's end for its luxury residential project, Manhattan Hill on the site of a former bus depot in Lai Chi Kok. Fare receipts scarcely budged in the first six months of this year, rising 1.7 per cent to HK$2.81 billion. Ridership slipped 0.5 per cent to 495.7 million passenger trips. The group blamed the decline in passengers on competition from rail services, in particular the Kowloon-Canton Railway Corp's Ma On Shan line. Higher operating expenses also took a heavy toll on the company's bus service to Hong Kong International Airport, with Long Win Bus profit falling 17.5 per cent to HK$8 million. RoadShow, which sells advertising on KMB buses, saw profit quadruple to HK$24.4 million even though its turnover barely changed at HK$111.5 million. Transport International's investments in the mainland's taxi and bus services fared better, with a 3.9 per cent jump in after-tax profit to HK$18.6 million. The group's turnover climbed 2.54 per cent to HK$3.22 billion. The interim dividend remained the same at 45 HK cents per share. Transport International shares traded lower yesterday, falling 55 HK cents, or 1.4 per cent, to close at HK$38.65.